There are many things to consider when choosing where to buy property, including the convenience of the location and what you want to achieve with the property, but the rental yield is hugely important. It is vital that landlords treat letting property as a business, and therefore, the importance of rental yield cannot be understated.
At Student Circle, we are pleased to say we have helped many landlords in and around Coventry and helping them understand the importance of the rental yield is a crucial part of what we do. If you are looking for support or ways to maximise your rental yield, get in touch.
What is the rental yield of property?
The rental yield is the return a landlord or investor should expect to obtain on their rental property. The rental yield is expressed as a percentage, and this is obtained through using the annual rental income of the rental property and then dividing this figure by the amount of money that has been invested in the property.
Why rental yield is important for landlords
Landlords should look to obtain as strong a rental return as possible. If a landlord doesn’t obtain a sufficient standard of income when renting their property, they will lose money; and even breaking even doesn’t offer any income. Also, it is important that a landlord generates income to ensure they can manage unexpected problems or unforeseen circumstances when letting property. Issues like problems with the roof or a broken boiler can cause major problems for a landlord, and therefore, a rental yield that generates income is of benefit to all investors.
Generating viable rental yield is essential for landlords
While it is sensible for landlords to consider long-term issues such as capital growth when investing in property, the importance of rental yield matters because this creates a platform for long-term growth. After all, if the rental property doesn’t generate income monthly, a landlord may not be able to hold on to the property long enough to experience the benefits of capital growth.
There are several factors that influence the rental yield, including the cost of the property, the amount of money being invested in the property and the rental fee generated each month. While there are other issues to consider when buying a property, such as the convenience to the landlord, the style of tenant that the landlords want to serve, the price of the property and even the style of property the landlord wants to let.
If you are looking to enter the rental market, it is vital that you are aware of rental yield and how it impacts on your return. At Student Circle, we are pleased to say we have helped many landlords consider rental yields and how to get the best return from their property. With the demand for rental accommodation from Coventry students, including students reaching out as far as Warwick University, we are pleased to say we have helped many landlords and if you are looking for guidance and assistance, please get in touch.